How the luxury segment is leading the hotel recovery

US luxury travelers flew to Europe this summer, and Asia could be next

Aug 22, 2023

Given that baby boomers are expected to leave the millennial generation an inheritance of $80 trillion by 2045, the dominance of luxury in the hotel market seems certain to persist. In order to remain relevant to this new demographic, luxury hotels must alter their marketing.

Key takeaways

  • Luxury hotel demand in the U.S. has always traditionally been led by leisure and bleisure travelers. But now, the luxury segment is earning its share of spend from business and corporate travelers;
  • Revenue managers have held a lot of rate premiums at luxury properties, although there does look to be a softening in year-over-year terms - any rate declines seem to come from not getting the right customer segmentation;
  • There is a mass exodus of Americans to Europe, where all COVID-19 restrictions have been lifted, air capacity is on the rise and visa issuance is much easier.

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